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Chinese Bitcoin exchange OKEx gets hacked, local police turn the other cheek

Chinese Bitcoin exchange OKEx has reportedly been hacked for a sum of $3 million USD, while Chinese police have refused to investigate the matter.

Chinese Bitcoin exchange OKEx has reportedly been hacked for a sum of $3 million USD, while Chinese police have refused to investigate the matter.

Here’s an unfortunate case of being on the wrong exchange at the wrong time: A series of reports have emerged that Chinese Bitcoin exchange OKEx has been hacked for the sum of six hundred Bitcoins (approximately $3 million USD) since August 28th – and Chinese police have now refused to investigate the matter further.

The report stems from August 28th, when a user first reported that his account was accessed by a German IP, wherein the hacker traded all Bitcoins associated with the account and canceled all pending orders – amounting to a loss of some 200 Bitcoins (around 750,000 USD).

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Other users have now joined their voices in chorus to note similar attacks, which are estimated to have resulted in the loss of some six hundred Bitcoins in total.

Unfortunately for the affected investors, OKEx is owned by OKCoin – a major Chinese Bitcoin trading platform. Just last month, Chinese government passed an executive order commanding all Bitcoin exchanges to cease trading to remain compliant – a move which resulted in a number of exchanges shuttering their operations.

Consequently, OKEx has claimed that as the theft did not pertain to a vulnerability in the platform, (instead, that users’ personal accounts were accessed through lax security measures) victims should instead contact the police.

However, at that remains less than comforting advice – considering that Chinese police consider Bitcoin trading as a type of pyramid scheme (as a result of the government order) and have refused to take up the case.

The news leaves affected Bitcoin traders out in the cold, who have been directed to add security checks – such as two-factor authentication – to their accounts immediately to avoid further issues.

OKEx issued the following release at press time:

Several reminders about improving OKEx accounts’ security

Dear OKEx Users:

Lately, we have noticed some unusual login activities of a few OKEx accounts. With our security system, all withdraw operations failed. However, attackers still caused some losses by randomly operating.

Several reasons might cause unusual login activities:

  1. Password is inappropriately kept or is too simple;

  2. Personal computer is infected with the virus, or the account is logged in on public computers;

  3. The user uses the same password on different websites and password is leaked on another website.

Users can improve security settings to ensure accounts’ safety:

  1. Use Google authentication, and turn on secondary verification:

How to use Google authentication:

1)    Download the APP: search and download Google Authenticator in APP Store with your phones;

2)   Use Google authentication: Google Authenticator will generate PINs based on time information. Please make sure time information is accurate on your phones. Select “My Account” – “Security Center” – “Set Google Authentication” – “Setting” by the sequence in OKEx website, the platform will generate a QR code. Open Google Authenticator APP and select “Accounts Settings” – “Scan QR code.” You will get a six-digit verification code. Fill in code in OKEx to finish setting.

  1. Change password regularly and try to avoid using the old passwords. Do not use the same password for different websites.

  2. Improve security awareness. Do not login accounts on public computers. Download and install the latest antivirus software to avoid personal computers being infected with the virus.

  3. Use the trading PIN to prevent random trading behaviors.

OKEx has a strong security system, but it requires users to turn on and enable some services. We strongly recommend users to activate those services following our instructions above to ensure your accounts’ security.

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Have your say!

What are your thoughts? How can traders best secure their accounts and trading activities in the view of an uncertain outlook on cryptocurrency exchanges? Be sure to let us know your opinion in the comments below!

Follow Bryan Smith on Twitter: @bryansmithSA